In what is being touted as the largest TCPA settlement ever, Capital One and three collection agencies have agreed to pay $75.5 million into a settlement fund to end litigation in a combined class action. The agreement admits no wrongdoing on the part of the companies for allegedly using autodialers and/or pre-recorded messages in calls to cell phones without the consumers’ express consent.

The cases began as separate TCPA actions against credit card issuer Capital One and three collection agencies: Leading Edge Recovery Solutions, Capital Management Services, and AllianceOne Receivables Management. The cases were consolidated into one action since the ARM firms were collecting on behalf of Capital One.

According to the settlement agreement signed by all parties in mid-July and preliminarily approved this week, Capital One will pay $73 million into the settlement fund with the ARM companies collectively paying some $2.5 million. Up to 30 percent (around $22.5 million) of the settlement fund will go to pay the consumers’ attorneys with the five lead plaintiffs receiving no more than $5,000 each. The amount to each other member of the class is currently unknown as the class is defined as:

“All persons within the United States who received a non-emergency telephone call from Capital One’s dialer(s) to a cellular telephone through the use of an automatic telephone dialing system or an artificial or prerecorded voice in connection with an attempt to collect on a credit card debt from January 18, 2008, through June 30, 2014, and all persons within the United States who received a non-emergency telephone call from a Participating Vendor’s dialer(s) made on behalf of Capital One to a cellular telephone through the use of an automatic telephone dialing system or an artificial or prerecorded voice in connection with an attempt to collect on a credit card debt from February 28, 2009, through June 30, 2014.”

But more than the monetary awards, the settlement notes that “The Parties agree that the core relief under the Settlement is Capital One’s business practice changes.” It was noted that Capital One has already “developed and implemented significant enhancements to its calling systems designed to prevent the calling of a cellular telephone with an autodialer unless the recipient of the call has provided prior express consent.”

All of the companies involved “deny all material allegations contained in the Master Complaint. Defendants specifically deny that they used automated dialers or prerecorded voice messages to call Plaintiffs or potential class members without their prior express consent; that they violated the TCPA; and that Plaintiffs and potential class members are entitled to any relief.”

The plaintiffs noted in their memorandum in support of the approval of the settlement that it is the “largest settlement cash sum—by far—in the 22-year history of the TCPA — $75,455,098.74 — into a settlement fund.”

The settlement must still meet customary formal approval, including class notification and qualification. The final approval hearing is scheduled for December 2, 2014.


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